Last year was probably one of the most interesting years for 3D printing software mergers and acquisitions. Between Shapeways, which acquired a majority stake in 3D file-sharing platform Thangs, and 3D Systems which agreed to sell its Geomagic reverse-engineering software to Hexagon’s Manufacturing Intelligence Division, some acquisitions went beyond the AM software market to encompass other design and engineering solutions. One of the biggest acquisitions announced in this area was Siemens’ agreement to acquire Altair Engineering Inc., a 3D design and simulation software developer (worth approximately $10 billion) which Siemens said would reinforce the German tech multinational’s market position and create the “world’s most complete AI-powered design and simulation portfolio.”
Apart from this agreement, Synopsys’ agreement to acquire Ansys between the two publicly traded companies had an announced enterprise value of approximately $35 billion based on the closing price of Synopsys common stock on December 21, 2023.
Why a European review?
Given the fact that these companies are active in several Member States and reach certain turnover thresholds, this particular merger needed to be examined at European level by the European Commission.
The European Commission’s EU merger review process provides a single assessment for transactions within its jurisdiction. A transaction may be cleared unconditionally, cleared with remedies, or prohibited if competition concerns are not resolved.
The markets under review
In the case of Synopsys and Ansys, the Commission investigated the impact of the transaction in the global markets for the supply of: (i) optics software; (ii) photonics software; and (iii) electronic design automation (‘EDA’) software tools used for the design of chips, where Synopsys and Ansys’s activities actually or potentially overlap.
The Commission also assessed the merged entity’s potential ability and incentive to offer bundles or to hamper the interoperability of: (i) different EDA software tools; or (ii) EDA software tools and semiconductor intellectual property (‘IP’) solutions for system-on-chip designs, of which Synopsys is a leading provider.
The Commission found that the transaction would have resulted in high combined market shares as well as high concentration levels. This concerned the optics, photonics and register-transfer-level power-consumption analysis software markets. The Commission also found that, after the merger, there would not be enough alternative competitors to exert sufficient competitive pressure on the merged entity. The transaction, as notified, would have led to higher prices and less choice for customers.
Proposed divestments and approval conditions
To address the Commission’s competition concerns, the parties offered divestments to a suitable purchaser. These covered the entire overlap in the merging parties’ respective activities in the markets where the Commission identified significant competition concerns, namely:
- Synopsys’ optics and photonics software, including Code V, LightTools, LucidShape, RSoft and ImSym.
- Ansys’ register-transfer-level power consumption analysis software PowerArtist.
In its decision announced on 10 January 2025, the Commission considered the proposed remedies sufficient to address those concerns. The approval depended on full compliance with the commitments, including a separate approval of a suitable buyer for the divested businesses.
Featured image: Synopsys.
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